Annual Report JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts for the year ended 30th June 2014

Transcription

1 EMIT 4 page cover_emit Cover 01/10/ :11 Page Annual Report JPMorgan Emerging Markets Investment Trust plc Annual Report & Accounts for the year ended 30th June 2014

2 Features Contents 1 Financial Results Strategic Report 2 Chairman s Statement 5 Investment Manager s Report 9 Summary of Results 10 Performance 11 Ten Year Financial Record 12 Ten Largest Equity Investments 13 Portfolio Analyses 14 Investment Activity 15 List of Investments 17 Business Review Governance 22 Board of Directors 24 Directors Report 27 Corporate Governance 32 Directors Remuneration Report 35 Statement of Directors Responsibilities 36 Independent Auditors Report Financial Statements 39 Income Statement 40 Reconciliation of Movements in Shareholders Funds 41 Balance Sheet 42 Cash Flow Statement 43 Notes to the Accounts Shareholder Information 65 Notice of Annual General Meeting 68 Glossary of Terms and Definitions 73 Information about the Company Objective Capital growth from emerging markets worldwide. Investment Policies - To invest in a diversified portfolio, concentrating on countries and shares with the most attractive prospects. To have no more than 50% of the Company s assets invested in any one region. - To invest no more than 15% of gross assets in other UK listed investment companies (including investment trusts). Further details on investment policies and risk management are given in the Directors Report on page 17. Benchmark The MSCI Emerging Markets Index with net dividends reinvested, in sterling terms. Capital Structure At 30th June 2014 the Company s issued share capital comprised 122,208,093 Ordinary shares of 25p each, including 3,116,122 shares held in Treasury, and 10,155,432 Subscription shares of 1p each. Continuation Vote At the Annual General Meeting held on 14th November 2011 an ordinary resolution of the shareholders approved the continuation of the Company until the Annual General Meeting in November Management Company During the year under review, the Company employed JPMorgan Asset Management (UK) Limited to manage its assets. With effect from 1st July 2014, JPMorgan Funds Limited ( JPMF ) was appointed Manager, following its approval as an Alternative Investment Fund Manager by the Financial Conduct Authority. AIC The Company is a member of the Association of Investment Companies. Website The Company s website, which can be found at includes useful information on the Company, such as daily prices, factsheets and current and historic half year and annual reports. FCA regulation of non-mainstream pooled investments The Company currently conducts its affairs so that the shares issued by the Company can be recommended by independent financial advisers to ordinary retail investors in accordance with the FCA s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The shares are excluded from the FCA s restrictions which apply to non-mainstream investment products because they are shares in an investment trust.

3 Financial Results Total returns (includes dividends reinvested) 3.5% Portfolio return net of fees and expenses 1,2 (2013: +11.6%) 1.0% Return to Ordinary shareholders 5 (2013: +7.6%) +1.4% Benchmark 3 (2013: +6.4%) 5.5p Dividend (2013: 5.5p) 3.2% Fully diluted return on net assets 1,4 (2013: +12.0%) Long Term Performance For periods ended 30th June % Year Performance 5 Year Performance JPMorgan Emerging Markets return to Ordinary shareholders 5 JPMorgan Emerging Markets diluted return on net assets 1 JPMorgan Emerging Markets undiluted return on net assets 1 Benchmark 3 10 Year Performance A glossary of terms and definitions is provided on page Source: J.P. Morgan. 2 Return on net assets, net of management fees and administration expenses, but excluding both the effect of Subscription shares which have been converted during the year and the dilutive impact of Subscription shares in issue at the year end. 3 Source: Datastream. The Company s benchmark is the MSCI Emerging Markets Index with net dividends reinvested, in sterling terms. 4 Return on net assets calculated using the diluted net asset value, which assumes that all outstanding Subscription shares were converted into Ordinary shares at the year end. Further details are given in the Chairman s Statement. 5 Source: Morningstar. JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

4 Strategic Report Chairman s Statement Performance In the year to 30th June 2014, the total return on the Company s portfolio, net of fees and expenses, was a negative 3.5%. This compares with the benchmark index, the MSCI Emerging Markets Index (in sterling terms), which returned +1.4%. The total return to ordinary shareholders was a negative 1.0%, reflecting the narrowing of the discount over the year, from 11.8% to 10.1%. The Company s objective is to achieve capital growth from emerging markets worldwide and its performance is measured against the MSCI Emerging Markets Index, in sterling terms, on a total return basis. Whilst it is disappointing to report underperformance for the latest financial year, the Board judges performance over the long term and this was only the second year in the last ten financial years that our Investment Manager significantly underperformed the benchmark. Indeed, as the graph on page one illustrates, the Company is still just ahead of the benchmark over three years and significantly ahead over five and ten years, despite last year s slippage. Our Manager s investment process focuses on bottom-up stock selection rather than a top-down asset allocation across markets. This has served the Company well over the long term but this did not add value during the year. The portfolio has had a traditional bias to high quality growth stocks which benefit directly from rising living standards in the countries we invest in rather than so-called value stocks with lower valuations. We did not get our stock and sector selection right last year as it turned out. In addition, currency factors were also a significant element of the portfolio s overall return over the twelve months, accounting not merely for an element of the underperformance directly, but also affecting stock selection in markets where currency effects were important drivers of relative stock returns. The Board supports the Investment Manager in placing importance on maintaining his investment discipline in identifying companies with superior earnings growth. As I have explained previously, following the successful issue of Subscription shares in 2009, we report our net asset value on a diluted basis to reflect the potential dilution to net asset value assuming full conversion of the Subscription shares to Ordinary shares. This can give a somewhat misleading impression of the Company s underlying portfolio performance and, as I have stated in previous years, it is not the basis on which we judge the performance of the Manager, which we continue to do excluding the dilution effect. For the record, the fully diluted return on net assets was 3.2%. as against the 3.5% reported above, on an undiluted basis. The Subscription shares expired on 31st July 2014 and were all converted to Ordinary shares, hence this complication will not arise in future years. Fees The underperformance this year gives rise to a negative performance fee accrual of 3.6 million, which will be carried forward and has to be offset against any future outperformance before any performance fee becomes payable. In other words, the Manager has to overcome this underperformance before we start paying a performance fee again. 2 JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

5 In the interim report, I indicated a change in our management fee arrangements with a move to a sliding scale. Our existing management fee was 1.0% of net assets which remains in place up to a value of 800 million, but for assets in excess of that level the fee now drops to a 0.75% of net assets. The Board is aware of the pressure to lower fees in the industry and wishes to remain competitive. We intend to keep fee arrangements under review and to that end we will consider whether our performance fee arrangement with the Manager remains appropriate. Discount Management We continue to monitor closely the share price and therefore the discount of our share price to the diluted net asset value. The Ordinary share price fell 1.9% over the year, from 567.0p to 556.0p at the year end. The discount, calculated on the fully diluted net asset value, ranged between 8.1% and 11.9%, averaging 10.2% through the year. A total of 276,705 shares were repurchased into Treasury during the year and a further 510,887 shares have been repurchased since the year end. The Board s policy on discount management remains unchanged it is prepared to take action to ensure that the fully diluted discount does not exceed 10% for an extended period, but only if the discount is out of line with our peer group and market conditions are orderly. We are prepared to buy shares in at discounts of between 8% and 10% in order to achieve this, subject to those caveats. Over the year under review, whilst the average discount was marginally above 10%, we believe our actions were effective in reducing the volatility of the discount, though we did not quite succeed in keeping it below 10% and it remained wider than our immediate peers. Now that the Subscription shares are fully exercised, we hope it will be easier to manage the discount. Unless market conditions are disorderly, the Board is keen to exercise its buyback powers to narrow the discount. Revenue and Dividends Income after expenses fell by some 24% this year, but we are proposing to maintain the dividend at 5.5 pence. This fall in income was largely driven by negative exchange rate effects on income earned overseas. Our investment policy is aimed at maximising capital growth and does not focus on income. We have however embarked on a more progressive approach to the dividend and are pleased to be able to maintain it this year, by dipping into our substantial revenue reserve. However, given that the Company s objective is to achieve capital growth, it remains the case that dividends may fluctuate from year to year according to our income position. The Board David Gamble, the Company s Senior Independent Director, will retire from the Board at the conclusion of the 2014 AGM. He joined the Board in 2006 when the Company acquired the assets of F&C Emerging Markets Investment Trust plc and, on behalf of the Board, I would like to thank David for his contribution to the Company. JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

6 Strategic Report Chairman s Statement continued Nigel Kenny will become our Senior Independent Director on David s retirement. Percy Mistry has indicated his intention to step down from the Board at the conclusion of the 2015 AGM. In order to ensure appropriate succession planning and continuity, we have commenced the search for a new Director and are seeking to make an appointment in early The Manager The Board monitors the performance of our Manager through the Management Engagement Committee. While last year was something of a disappointment, we remain satisfied with the Manager s overall performance, not only in terms of investment performance but also in terms of risk management, administration, controls and compliance, where we believe we are well served. As I have explained in previous statements, significant regulatory change was brought about with the implementation of the Alternative Investment Fund Managers Directive ( AIFMD ) in July this year. In order to ensure compliance with the new regime, the Company entered into a new management agreement with JPMorgan Funds Limited, an affiliate of JPMorgan Asset Management (UK) Limited, and appointed Bank of New York Mellon as its depositary, with effect from 1st July There are some additional reporting and disclosure requirements as a result of the AIFMD, but in practical terms the way in which the Company is managed remains largely unchanged. Continuation Vote As shareholders will be aware, every three years the Company offers shareholders a Continuation Vote to determine whether the Company should continue in existence. Shareholders will be asked to vote on this in a resolution at the forthcoming AGM in November. The Board believes strongly that the Company should continue and it urges shareholders to support the Company by voting yes to the resolution. Outlook Emerging markets have had a troubled time but the situation seems to have stabilised. On a valuation basis, they are generally regarded as looking attractive despite the risks compared to developed markets. We are not out of the woods yet with regard to volatility in emerging markets but we appear to be moving in the right direction. We trust also that this will be enhanced by a return to our Manager s successful record of long term outperformance against the emerging markets benchmark. Alan Saunders Chairman 1st October JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

7 Investment Manager s Report Results I am disappointed by the results we have achieved for you as shareholders this year: they failed to match the returns from the asset class as a whole. While the benchmark index gained 1.4% in sterling terms, the value of the portfolio after fees and expenses fell by 3.5%; the total return to ordinary shareholders, including the movement in the share price and dividends paid, was 1.0%. Shareholders will, I am sure, also be disappointed by a year in which neither markets nor your manager produced results to shout about. I hope, however, that you will also have the patience to consider this short term outcome in the context of longer term results: the information on page 11 of this report, which covers the last ten years of the Company s operation, suggests that such patience has been rewarded in the past. Markets during the year Currencies and politics: these have been the dominant themes throughout the year. Will US interest rates ever rise? The mere hint of a move in this direction, as the US Federal Reserve moved to reduce the monetary stimulus applied by quantitative easing, was enough to cause considerable currency volatility in emerging markets in the second half of 2013, especially in India, which suffered a mini-crisis in the rupee. The thought that US interest rates might eventually increase led investors to shun other countries which need to fund deficits by attracting foreign capital, so significant currency weakness was also seen in Indonesia, South Africa, Turkey and Brazil. It may seem strange, but I regard this weakening of currencies as a better outcome than the alternative route of adapting economic policies to maintain exchange rates. It means that the market is realigning prices to correct imbalances, and in the process forcing reform and change on governments which were trying to deny economic realities. No matter how difficult this may seem, it is almost certainly better than allowing the imbalances to build up for longer, which would make for more painful adjustments later. In the last twenty years I have seen two examples of economic policies based on fixed exchange rates, and thus forced the entire burden of adjustment onto domestic prices; the first in Asia in the 1990 s, and the second in the Eurozone, where it still applies. Both led to debt-fuelled economic expansion and both ended in prolonged recessions, with a painful and very protracted recovery. A conventional economic cycle, of which India is a good current example, seems a lot better to me. On the political front, it s been a very busy year in emerging markets. A number of elections in important countries cluster in 2014: India, Brazil, Indonesia, and South Africa, some already past and some yet to come. These events tend to punctuate market developments; before them, there is uncertainty; companies defer decisions to see how the result will fall, and stock market investors do the same. The BJP victory in India in May spurred a sharp rise in the Indian market, though in fact any result would probably have produced some positive outcome merely by removing the uncertainty; but investors also hope that more effective government, combined with an economic cycle that was already close to bottoming, may offer better conditions for both the economy and the stocks market than the recent past. Most would probably see the greatest political risk today in Russia, not because of any election, but because of the country s newly belligerent foreign policy in Ukraine. As I write, the US and Europe are considering further sanctions, while one of the unintended consequences of Mr Putin s interventions has been to lend a new sense of purpose and solidarity to NATO. It is impossible, I suggest, to forecast what JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

8 Strategic Report continued Investment Manager s Report continued Performance attribution for the year ended 30th June 2014 % % Contributions to total returns Benchmark 1.4 Asset allocation 2.9 Stock selection 5.0 Currency 1.4 Gearing/cash 0.3 Investment Manager contribution 3.8 Portfolio return 2.4 Management fee/ Other expenses 1.1 Performance fee 0.0 Share buy-back/issuance 0.0 Portfolio return net of fees and expenses 3.5 Exercise of Subscription shares during the year 0.0 Undiluted return on net assets 3.5 Dilution effect of potential exercise of remaining Subscription shares 0.3 Diluted return on net assets 3.2 Impact of change in discount 2.2 Return to Ordinary shareholders 1.0 Source: Xamin/Datastream/Morningstar. All figures are on a total return basis. Performance attribution analyses how the Company achieved its recorded performance relative to its benchmark. A glossary of terms and definitions is provided on page 68. will happen in politics. Sometimes politicians can make very bad choices which appear irrational from almost any angle. But our job is to think about risk and reward as far as share prices are concerned; at some price, very bad things are already priced in, while the possibility of better outcomes is almost completely ignored by the market. At that point, we should get interested. I increased the portfolio s investments in India in the year to June 2013, not because I had any idea that Mr Modi would win the election in May 2014, but because good businesses were priced at levels which seemed to assume no economic recovery and no political improvement either. Today, if there is anywhere in the world where a similar opportunity is forming, it may be Russia, though good businesses are rather harder to find there than they are in India. The portfolio Our stock selection this past year has not been effective, though our choice of countries actually went well: selection of stocks within markets cost almost 5% compared to the index return and we recovered only 3% of this by having the portfolio tilted towards the right countries. In addition to this, currencies were a significant factor for the reasons explained above. Currency moves affect the portfolio s investments in a variety of ways, not all of which are captured by the simple attribution analysis shown here. The biggest single positive contributor to performance during the year was Tata Consultancy, an Indian IT services business whose revenues arise mostly in dollars and euros and whose costs accrue largely in Indian rupees. Companies like this reap a windfall, temporarily, when the rupee falls. On the other hand, a company like Shoprite, a South African supermarket operator, works predominantly in domestic currency; its profits therefore decline, in sterling terms, when the rand falls. Over the year, the more successful stocks might appear to have little in common; in addition to Tata Consultancy, the portfolio benefitted from owning Cielo, a Brazilian credit card processor, Weg, a Brazilian company which manufactures and exports electric motors; Delta Electronics, a Taiwanese electronics and industrial automation business and International Personal Finance, a consumer credit company. In fact, several of the better investments are export-focused companies selling across the world and profiting from gradual recovery in Western economies, especially the USA. By contrast, our worst stocks were clustered in countries whose currencies declined: not just Shoprite, mentioned above, but also stocks like Garanti, a Turkish bank, Unilever Indonesia, and United Breweries, India s largest brewer. While I will make more comments below about the outlook for the portfolio, I might conclude here by saying that I have always thought it very important to frame decisions consistently as an investor. Assets denominated in another currency can eventually recover their value, if you look from a sterling point of view; but this usually happens not because the nominal exchange rate recovers fully, but because prices in the other currency are increased by inflation. As long as we own companies that have pricing power and whose revenues can therefore capture inflation, losses in value (in sterling terms) due to currency declines can be recovered. So if we have bought such stocks on the basis of their long term ability to grow their real value, it would be very contradictory to sell them at the worst point in a currency cycle; we have just had the worst phase: the next phase should be better. 6 JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

9 Looking forward (and back) I first began to work for this investment trust in June 1994, so I have now had the responsibility and privilege of managing this Company s portfolio for twenty years. One of the consequences of such a long time in any role, as politicians very occasionally discover, is that there is nowhere to hide. I cannot plead inexperience, I cannot blame other people, I cannot claim that failures are down to bad luck. Many others have helped me, bringing me good ideas, and the occasional less good one, over the years; while they must take credit for the successes we have had as investors, the failures and mistakes are mine alone. I do not want to dwell at length on the statistical detail of past results shareholders can read about those in the annual reports published over the years but I would assert that the outcomes achieved should at least encourage us to keep working in the same way. This is an important point for the future, in my opinion: the things which worked before are likely to work again, and the things to avoid may well resemble the disappointments of the past. By this I do not mean that the same stocks will always perform well, but rather that the way I have tried to work in the past may well be my best indicator for how to work in the future. The thoughts that go through an investor s mind are not always neatly ordered or linear, but if I were to draw out those that seem to have an enduring relevance for me, I would choose the following things that I keep coming back to when I think about businesses and investing: Keep it simple: the financial world is in love with complexity, yet in the end it all boils down to two questions: will I lose money? will I make money? Everything else is just a subordinate clause in the attempt to reach an answer. Be very wary of high levels of debt; just as cash provides you with choices, debt removes your freedom to act; in the long run, that is often fatal. Do not be fooled by inflation: it is not worth anything. Inflation eases life for businesses and flatters their managers, but one should always try to look through the numbers to take out the effects of inflation, especially in businesses whose assets are replaced on long time cycles. Understand why companies make money: otherwise you can t understand why they will cease to do so. Think about the future, not the past; this is difficult, because it involves uncertainty not facts. Use your imagination, but do not let it run away with you. Conviction is rare, and therefore very valuable. I should always ask myself: what do I know? and be honest enough to know when I am guessing instead. Perhaps most of all, people make the difference. The longer time horizon one has, the more this is true; most of the time, when I meet companies, I want to form an impression of the people who run them. When we find a combination of good people in a fundamentally sound business, we want to own it for as long as possible. Finally, think about businesses, not macroeconomics, and about what you would like to find, rather than what you see right in front of you. The index only tells you about the past, while one only has to look at China to understand that economic growth does not necessarily mean that you can make money in the stock market. JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

10 Strategic Report continued Investment Manager s Report continued So when I look forward in emerging markets, what do I want to find? I wrote in last year s report about how returns can be broken down into their component parts growth, dividends, change in valuation and currency. That framework, which I have always found useful but never precise, is really the second stage of what I think about. The first is more basic: I try to understand the true economics of a company (usually understandable as long as you can understand the differences between accounting and real life). By economics, I mean: does it make money for its shareholders, real cash, after everything. You would be surprised how many businesses do not really do this. Then, I try to think about its duration: whether it can go on doing this, and invest more money to make more profits, in the future. The longer I go on as an investor, the more significance I place on the strength of a company, because strong companies endure. And finally I think about governance, which in the end is all about people; do they look after our interests as shareholders and do they spend our money well in the business? If they do not, they destroy both the economics and the duration of the business sooner or later. Most of the stocks we will own in the portfolio during the next few years are already in the portfolio: I own them on your behalf because I think they will continue to compound in value over time at a good rate, though never in a straight line. I own them because I believe that they are fundamentally sound businesses which meet the criteria I outlined in the previous paragraph. Sometimes, they are more highly valued than I would like; usually, until this gets to extremes, I ignore it. I would rather own an outstanding business that is a bit expensive than a poor company which is a bit cheap; in a few years time, if their share prices do not change, the good company will look better value, while the poor one will look worse. My main intent, as I think about the prospects for the portfolio, is to find good companies which are strong enough to withstand competition, not just financially, but operationally. Notwithstanding the subdued stock market returns of the last few years, the long term prospects for making money in emerging markets remain huge: how can there not be great investment opportunities in an asset class which covers most of the world s population and a large and rising share of the world economy? If one wanted to look for a reason to be cautious, one could ask: how can immature economies produce companies to compete with the world s best? Will that opportunity not be taken by companies from the developed world, rather than by indigenous firms? And yet this clearly can happen. The best firms in emerging markets are highly competitive in any context. This is evidently true of export-oriented businesses, which would not exist otherwise; but in domestic industries the same competitiveness can also be found. There are few businesses more localised than beer; and today, the two largest companies in the world in that industry, AB Inbev and SAB Miller, both grew from beginnings in emerging markets. It is going to be very important, as competition continues to intensify, to think about how resilient businesses really are, in order understand what they are really worth. I am confident that an approach to investment which has always concentrated on the strength of the businesses owned as well as on their price, can continue to deliver returns to investors in the future, regardless of the uncertainty that the future always holds. Austin Forey Investment Manager 1st October JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

11 Summary of Results Total returns for the year ended 30th June Return to Ordinary shareholders 1 1.0% +7.6% Portfolio return net of fees and expenses 2 3.5% +11.6% Undiluted return on net assets 2 3.5% +10.0% Fully diluted return on net assets 2 3.2% +12.0% Benchmark % +6.4% % change Net asset value, share price and discount at 30th June Shareholders funds ( 000) 750, , Undiluted net asset value per Ordinary share 630.3p 658.4p 4.3 Diluted net asset value per Ordinary share 623.4p 649.3p 4.0 Ordinary share price 556.0p 567.0p 1.9 Ordinary share price discount to diluted net asset value per Ordinary share % 11.8% Ordinary shares in issue (excluding shares held in Treasury) 119,091, ,353,816 Subscription share price 10.0p 76.5p 86.9 Subscription shares in issue 10,155,432 10,170,292 Revenue for the year ended 30th June Gross revenue ( 000) 16,071 18, Net revenue attributable to Ordinary shareholders ( 000) 6,105 8, Revenue return per Ordinary share undiluted 5.12p 6.77p 24.4 Revenue return per Ordinary share diluted 5.12p 6.73p 23.9 Dividend per Ordinary share 5.50p 5.50p 0.0 Gearing/(net cash) at 30th June 5 (4.6)% (4.2)% Ongoing charges % 1.14% Ongoing charges including performance fee payable 1.17% 1.77% A glossary of terms and definitions is provided on page Source: Morningstar. 2 Source: J.P. Morgan. 3 Source: Datastream. The Company s benchmark is the MSCI Emerging Markets Index with net dividends reinvested, in sterling terms. 4 Capital only. Source: Bloomberg. 5 Gearing represents the excess amount above shareholders funds of total assets (including net current assets/liabilities) less cash/cash equivalents expressed as a percentage of shareholders funds. Total assets include total investments and net current assets/liabilities less cash/cash equivalents and excluding bank loans of less than one year. If the amount calculated is negative, this is shown as a net cash position. 6 Management fee and all other operating expenses, excluding interest and performance fee payable, expressed as a percentage of the average of daily net assets during the year. Ongoing charges are calculated in accordance with guidance issued by the Association of Investment Companies. JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

12 Strategic Report continued Performance Ten Year Performance Figures have been rebased to 100 at 30th June Source: Morningstar. JPMorgan Emerging Markets share price total return. JPMorgan Emerging Markets diluted net asset value total return. JPMorgan Emerging Markets undiluted net asset value total return. Benchmark. Performance Relative to Benchmark Figures have been rebased to 100 at 30th June Source: Morningstar. JPMorgan Emerging Markets share price total return. JPMorgan Emerging Markets undiluted net asset value total return. Benchmark. 10 JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

13 Ten Year Financial Record At 30th June Shareholders funds ( m) Undiluted net asset value per Ordinary share (p) Diluted net asset value per Ordinary share (p) Ordinary share price (p) Discount (%) Subscription share price (p) Gearing/(net cash) (%) (4.2) (5.0) (0.2) 0.8 (4.7) (0.8) (1.7) (5.2) (3.7) (4.2) (4.6) Year ended 30th June Gross revenue attributable to shareholders ( 000) 4,474 5,435 8,488 8,055 9,456 11,344 12,335 15,912 16,480 18,487 16,071 Diluted revenue return per Ordinary share (p) Dividend per Ordinary share (p) Ongoing charges (%) Rebased to 100 at 30th June 2004 Ordinary share price total return Undiluted net asset value total return Diluted net asset value total return Benchmark A glossary of terms and definitions is provided on page Figures have been restated to reflect changes in accounting policy regarding dividends payable. Such dividends are now included in the accounts in the year in which they are paid. Years prior to 2005 have not been restated. 2 The diluted net asset value per Ordinary share calculated at 30th June 2010 onwards assumes that all outstanding Subscription shares were converted into Ordinary shares at the year end. There were no dilutive potential Ordinary shares in issue at 30th June 2009 and prior years. 3 The returns per Ordinary share for the year ended 30th June 2010 onwards have been adjusted for the effect of the dilutive Subscription shares. There were no dilutive potential Ordinary shares in issue at 30th June 2009 and prior years. 4 Management fee and all other operating expenses, excluding interest and performance fee payable, expressed as a percentage of the average of daily net assets during the year. Ongoing charges are calculated in accordance with guidance issued by the Association of Investment Companies. The ongoing charges including the performance fee payable were 1.17% (2013: 1.77%) (2009 and prior years: the average of the opening and closing net assets). 5 Source: Morningstar/J.P. Morgan. 6 Source: Morningstar/Datastream. JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

14 Strategic Report continued Ten Largest Equity Investments at 30th June Valuation Valuation Company Country 000 % % 1 Housing Development Finance India 29, , Housing Development Finance provides housing finance in India. The company provides long-term housing loans to low and middle income individuals and corporations. The company also provides construction finance to real estate developers, and lease financing facilities to companies and development authorities for infrastructure and other assets. Taiwan Semiconductor Manufacturing Taiwan 25, , Taiwan Semiconductor Manufacturing Company Ltd. manufactures integrated circuits based on its proprietary designs. The company offers a comprehensive set of integrated circuit fabrication processes to manufacture CMOS logic, mixed-mode, volatile and non-volatile memory and BiCMOS chips. Taiwan Semiconductor is an affiliate of Philips Electronics N.V. Tata Consultancy Services India 22, , Tata Consultancy Services, a division of Tata Sons Limited, is a global IT services organisation that provides a comprehensive range of IT services to its clients in diverse industries. The company, caters to finance and banking, insurance, telecommunication, transportation, retail, manufacturing, pharmaceutical, and utility industries. International Personal Finance United Kingdom 22, , International Personal Finance offers small, unsecured cash loans made and collected by agents, face to face with the customer. The company operates in the developing markets of Central and Eastern Europe and Mexico, providing the underserved segment of the consumer credit market with access to cash loans. Magnit Russia 20, , Magnit retails food. The company operates a chain of discount supermarkets. Hyundai Motor South Korea 19, , Hyundai Motor Company manufactures, sells, and exports passenger cars, trucks, and commercial vehicles. The company also sells various auto parts and operates auto repair service centers throughout South Korea. Hyundai Motor provides financial services through its subsidiaries. WEG Brazil 18, , WEG S.A. manufactures and distributes industrial machinery. The company s products include electric motors, power and distribution transformers, large motors, DC motors, generators, drives, programmable controllers, electric panels and electrical components. WEG also offers technical assistance and repair services for its products. AIA Hong Kong 18, , AIA Group Ltd. offers insurance and financial services. The company writes life insurance for individuals and businesses, accident and health insurance, retirement planning, and wealth management services. Cielo 2 Brazil 18, , Cielo SA is an electronic payment solutions company based in Brazil and Latin America. The company is responsible for accreditation of commercial establishments, capture, transmission, processing and settlement of transactions made with credit cards and debit cards as well as network management services. Ultrapar Participações Brazil 16, , Ultrapar Participacoes S.A. is a Brazilian holding company. The company s holdings include a gas distribution company, a petrochemical company, and a petrochemical and gas storage and transportation company. Total 213, Based on total assets less current liabilities of 750.6m (2013: 785.8m). 2 Not included in the ten largest equity investments at 30th June At 30th June 2013, the value of the ten largest equity investments amounted to 202.7m representing 25.8% of total assets less current liabilities. 12 JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

15 Portfolio Analyses 30th June th June 2013 Portfolio Benchmark Portfolio Benchmark Geographic % % % % East Asia Latin America South Asia Europe/Middle East/Africa Total equities Liquidity fund Net current assets Total Based on total assets less current liabilities of 750.6m (2013: 785.8m). 30th June th June 2013 Portfolio Benchmark Portfolio Benchmark Sector % % % % Financials Consumer Staples Information Technology Industrials Consumer Discretionary Materials Telecommunication Services Energy Health Care Utilities Total equities Liquidity fund Net current assets Total Based on total assets less current liabilities of 750.6m (2013: 785.8m). JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

16 Strategic Report continued Investment Activity during the year ended 30th June 2014 Value at Value at 30th June 2013 Changes 30th June 2014 % of Purchases Sales in value % of 000 portfolio portfolio India 120, ,587 (16,017) 6, , Brazil 130, ,622 (7,857) (5,521) 119, China and Hong Kong 141, ,692 (44,150) (16,082) 105, South Africa 95, ,584 (8,812) (7,052) 81, Taiwan 45, ,598 5,846 55, Mexico 49, ,839 (825) (283) 52, Indonesia 37, ,576 (1,036) (6,704) 35, South Korea 30, (318) 30, Russia 30, ,628 (3,937) 29, United Kingdom 22, (3,727) 3,897 22, Turkey 21, ,032 (5,356) (1,906) 19, Peru 7, , Thailand 8,043 (839) 7, Chile 7, (287) 6, Poland 5,353 (263) 5, Malaysia 12, (4,739) (2,994) 4, Pakistan Argentina 10, (10,315) (48) Total equity investments 755, ,939 (102,834) (29,480) 714, Liquidity fund 28, ,128 (81,137) (2,617) 31, Total investments 783, ,067 (183,971) (32,097) 745, JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

17 List of Investments at 30th June 2014 Valuation Company 000 India Housing Development Finance 29,917 Tata Consultancy Services 22,712 Indusind Bank 16,476 ITC 13,726 Mahindra & Mahindra Financial Service 10,339 Infosys Technologies 1 10,141 United Breweries 9,675 Supreme Industries 6,852 Infosys Technologies 5,210 ACC 5,021 Ambuja Cements 3, ,377 Brazil WEG 18,590 Cielo 18,284 Ultrapar Participações 16,712 Ambev 1 13,344 Itau Unibanco 11,528 Vale 1 11,114 Companhia de Concessões Rodoviárias 8,981 Lojas Renner 8,463 TOTVS 7,280 Marcopolo 4, ,168 China and Hong Kong AIA 18,554 Jardine Matheson 14,103 Tsingtao Brewery 12,496 Baidu 1 11,673 Tencent Holdings 10,632 Cafe De Coral 8,248 Sun Art Retail Group 7,905 Tingyi 6,440 Hang Lung Properties 5,003 Convenience Retail Asia 4,483 Wumart Stores 2,803 H.K. Aircraft Engineering 2, ,115 Valuation Company 000 South Africa Capitec Bank 12,427 MTN 11,030 Discovery 10,993 Bidvest Group 10,609 Clicks 9,182 RMB 8,454 Shoprite Holdings 5,984 Tiger Brands 5,863 Mr Price 5,531 Massmart 1,373 81,446 Taiwan Taiwan Semiconductor Manufacturing 1 25,955 Delta Electronics 15,681 President Chain Store 10,250 Chailease 3,247 55,133 Mexico Grupo Financiero Banorte 15,833 Gentera 13,852 Wal-Mart De Mexico 10,307 Grupo Aeroportuario del Sureste 1 7,981 Mexichem 4,123 52,096 Indonesia Bank Rakyat Indonesia 11,922 Astra International 9,502 Unilever Indonesia 5,961 Bank Central Asia 5,202 Holcim 2,756 35,343 JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

18 Strategic Report continued List of Investments continued at 30th June 2014 Valuation Company 000 South Korea Hyundai Motor 19,524 Hyundai Mobis 8,207 Shinsegae Food 2,820 30,551 Russia Magnit 20,601 Sberbank 7,478 TCS ,009 United Kingdom International Personal Finance 22,351 22,351 Turkey KOC 12,193 Turkiye Garanti Bankasi 7,086 19,279 Valuation Company 000 Poland Eurocash 5,090 5,090 Malaysia Top Glove 4,273 4,273 Pakistan BRR Guardian Modaraba 70 Total equity investments 714,278 Liquidity fund JPMorgan US Dollar Liquidity Fund 2 31,596 Total investments 745,874 1 Includes ADRs/GDRs/ADSs/BDRs. 2 Managed by JPMorgan Asset Management. 70 Peru Credicorp 7,963 7,963 Thailand Advanced Info Service 7,204 7,204 Chile Banco Santander-Chile 1 6,810 6, JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

19 Business Review The aim of the Strategic Report is to provide shareholders with the ability to assess how the Directors have performed their duty to promote the success of the Company during the year under review. To assist shareholders with this assessment, the Strategic Report sets out the structure and objective of the Company, its investment policies and risk management, investment limits and restrictions, performance and key performance indicators, share capital, principal risks and how the Company seeks to manage those risks, the Company s environmental, social and ethical policy and finally its future developments. Structure and Objective of the Company JPMorgan Emerging Markets Investment Trust plc is an investment trust company that has a premium listing on the London Stock Exchange. Its objective is to achieve capital growth from emerging markets worldwide. In seeking to achieve this objective the Company employs JPMF to actively manage the Company s assets. The Board has determined an investment policy and related guidelines and limits, as described below. It aims to outperform the MSCI Emerging Markets Index. The Company is subject to UK and European legislation and regulations including UK company law, Financial Reporting Standards, the UKLA Listing, Prospectus, Disclosure and Transparency Rules, taxation law and the Company s own Articles of Association. The Company is an investment company within the meaning of Section 833 of the Companies Act 2006 and has been approved by HM Revenue & Customs as an investment trust (for the purposes of Sections 1158 and 1159 of the Corporation Tax Act 2010) for the year ended 30th June 2013 and future years. The Directors have no reason to believe that approval will not continue to be obtained. The Company is not a close company for taxation purposes. Investment Policies and Risk Management In order to achieve the investment objective and to seek to manage risk, the Company invests in a well diversified spread of countries, industries and companies. The Company invests primarily in quoted securities in emerging stock markets but, where necessary or appropriate in the absence of suitable quoted securities, it may invest in unquoted securities. It may invest in other collective investment schemes, but usually only where legal restrictions prevent direct investment by foreigners or prudent diversification can best be achieved in this way. The Company conducts its affairs so as to achieve and maintain approved investment trust status in the UK. The Company is managed to produce capital growth and not to produce any particular level of dividend and therefore the level of dividend will vary. The Board s policy is to employ gearing when the Manager believes it is appropriate to do so. The Board regularly reviews this policy. Should the Manager decide to employ gearing, the Company will remain invested in the range of % under normal market conditions. The Board has set no minimum or maximum limits on the number of investments in the portfolio but it is a relatively concentrated portfolio consisting typically of between 60 and 90 investments. The assets are managed by an investment manager based in London who is supported by a 50 strong emerging markets equity team. It should be noted that historically, emerging market companies (and investments in their shares) have shown greater volatility and may be subject to certain political and corporate governance risks which are not typically associated with more developed markets and economies. Investment Restrictions and Guidelines The Board seeks to manage the Company s risk by imposing various investment limits and restrictions: The Company will not invest more than 10% of its total assets in any one individual stock (excluding investment trusts) at the time of acquisition. No more than 50% of the Company s assets may be invested in any one region. No more than an aggregate of 25% of the Company s assets (before deducting borrowings) may be invested in: (i) securities not listed on any recognised investment exchange; and (ii) holdings in which the Company s interest amounts to 20% or more of the aggregate of the equity capital (including any capital having an element of equity) of any one listed company (other than an investment trust which has been approved by HM Revenue & Customs or which would qualify for such approval but for the fact that it is not listed). In accordance with the Listing Rules of the UK Listing Authority, the Company will not invest more than 15% of its gross assets in other UK listed investment companies and will not invest more than 10% of its gross assets in companies that themselves may invest more than 15% of gross assets in UK listed investment companies. JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

20 Strategic Report continued Business Review continued The Company does not normally enter into derivative transactions, other than short term forward currency contracts to manage working capital requirements and to do so requires prior Board approval. Performance Relative to Benchmark Index Figures have been rebased to 100 at 30th June These limits and restrictions may be varied by the Board at any time at its discretion. Compliance with the Board s investment restrictions and guidelines is monitored continuously by the Manager and is reported to the Board on a monthly basis. Performance In the year to 30th June 2014, the Company produced a total return to Ordinary shareholders of 1.0% and an undiluted total return on net assets of 3.5%. This compares with the return on the Company s benchmark index of +1.4%. At 30th June 2014, the value of the Company s investment portfolio (including liquidity fund holdings) was million. The Investment Manager s Report on pages 5 to 8 includes a review of developments during the year as well as information on investment activity within the Company s portfolio. Total Return, Revenue and Dividends Gross total loss for the year amounted to 17.2 million (2013: 95.0 million return) and net total loss after deducting management fee, performance fee, other administrative expenses, finance costs and taxation amounted to 27.2 million (2013: 81.4 million return). Distributable income for the year amounted to 6.1 million (2013: 8.1 million) Source: Morningstar. JPMorgan Emerging Markets share price total return. JPMorgan Emerging Markets undiluted net asset value total return. Benchmark. Ten Year Performance Figures have been rebased to 100 at 30th June The Directors recommend a final dividend of 5.5p per share payable on 26th November 2014 to holders on the register at the close of business on 24th October This distribution will amount to 6.6 million. The revenue reserve after payment of the final dividend will amount to 8.9 million (2013: 9.4 million). Key Performance Indicators ( KPIs ) The Board uses a number of financial KPIs to monitor and assess the performance of the Company. The principal KPIs are: Performance against the benchmark index This is the most important KPI by which performance is judged. Information on the Company s performance is given in the Chairman s Statement and the Investment Manager s Report Source: Morningstar. JPMorgan Emerging Markets share price total return. JPMorgan Emerging Markets diluted net asset value total return. JPMorgan Emerging Markets undiluted net asset value total return. Benchmark. Performance against the Company s peers The principal objective is to achieve capital growth relative to the benchmark. However, the Board also monitors the performance relative to a broad range of competitor funds. Performance attribution The purpose of performance attribution analysis is to assess how the Company achieved its performance relative to its benchmark index, i.e. to understand the impact on 18 JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

21 the Company s relative performance of the various components such as asset allocation and stock selection. Details of the attribution analysis for the year ended 30th June 2014 are given in the Investment Manager s Report on page6. Share price discount to net asset value ( NAV ) per share The Board has a share repurchase policy which seeks to address imbalances in supply of and demand for the Company s shares within the market. This helps to reduce the volatility and absolute level of the discount to NAV per share at which the Company s shares trade in relation to its peers in the sector. In the year to 30th June 2014, the Company s shares traded at a discount to the fully diluted net asset value per share of between 8.1% and 11.9%. Discount Performance Source: Datastream (month end data). JPMorgan Emerging Markets share price discount to diluted net asset value per Ordinary share. Ongoing charges The ongoing charges represent the Company s management fee and all other operating expenses excluding finance costs and performance fee payable, expressed as a percentage of the average of the daily net assets during the year. The ongoing charges for the year ended 30th June 2014 were 1.17% (2013: 1.14%). The Board reviews each year an analysis which shows a comparison of the Company s ongoing charges and its main expenses with those of its peers. Share Capital The Directors have, on behalf of the Company, the authority both to repurchase shares in the market for cancellation and to issue new shares for cash on behalf of the Company. A total of 276,705 shares were repurchased into Treasury during the year under review, for a total consideration of 1,502,850. The Company did not allot any new shares for cash other than on the conversion of Subscription shares. Since the year end a further 510,887 shares have been repurchased into Treasury. Resolutions to renew the authorities to issue new shares and to repurchase shares for cancellation will be put to shareholders for approval at the Annual General Meeting. The full text of these Resolutions is set out in the Notice of Meeting on pages 65 and 66. During the year the Company issued 14,860 Ordinary shares for a total consideration of 81,000 on the conversion of Subscription shares. Since the year end, a further 10,093,486 Ordinary shares have been issued for a total consideration of 54,808,000. Subscription Shares On 11th June 2009 the Company issued 22,059,783 Subscription shares as a bonus issue to Ordinary shareholders on the basis of one Subscription share for every five Ordinary shares held. Each Subscription share conferred the right (but not the obligation) to subscribe for one Ordinary share on any business day during the period from 1st August 2009 to 31st July 2014 (both dates inclusive) when the rights under the Subscription shares lapsed. All of the remaining Subscription shares in issue were converted to Ordinary shares, either by Subscription shareholders or by the trustee appointed to act on behalf of the remaining Subscription shareholders, as at the date of expiry. Principal Risks With the assistance of the Manager, the Board has drawn up a risk matrix, which identifies the key risks to the Company. These key risks fall broadly under the following categories: Investment Underperformance: An inappropriate investment strategy, for example asset allocation, the level of gearing or the degree of portfolio risk, could lead to underperformance against the Company s benchmark index and peer companies, resulting in the Company s shares trading on a wider discount. The Board manages these risks by diversification of investments and through a set of investment restrictions and guidelines which are monitored and reported on by the Manager. The Manager provides the Directors with timely and accurate management information, including performance data and attribution JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

22 Strategic Report continued Business Review continued analyses, revenue estimates, liquidity reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Investment Manager, who attends all Board meetings, and reviews data which show statistical measures of the Company s risk profile. Political, Economic and Governance: Administrative risks, such as the imposition of restrictions on the free movement of capital. These risks are discussed by the Board on a regular basis. Loss of Investment Team or Investment Manager: A sudden departure of the investment manager or several members of the investment management team could result in a short-term deterioration in investment performance. The Manager takes steps to reduce the likelihood of such an event by ensuring appropriate succession planning and the adoption of a team based approach, as well as special efforts to retain key personnel. Discount: A disproportionate widening of the discount relative to the Company s peers could result in loss of value for shareholders. The Board regularly discusses discount policy and has set parameters for the Manager and the Company s broker to follow. Change of Corporate Control of the Manager: The Board holds regular meetings with senior representatives of JPMF in order to obtain assurance that the Manager continues to demonstrate a high degree of commitment to its investment trusts business through the provision of significant resources. Accounting, Legal and Regulatory: In order to qualify as an investment trust, the Company must comply with Section Details of the Company s approval are given under Structure and Objective of the Company on page 17. Should the Company breach Section 1158, it might lose investment trust status and, as a consequence, gains within the Company s portfolio would be subject to Capital Gains Tax. The Section 1158 qualification criteria are continually monitored by the Manager and the results reported to the Board each month. The Company must also comply with the provisions of the Companies Act 2006 and, since its shares are listed on the London Stock Exchange, the UKLA Listing Rules and Disclosure and Transparency Rules ( DTRs ). A breach of the Companies Act could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules or DTRs could result in the Company s shares being suspended from listing which in turn would breach Section The Board relies on the services of its Company Secretary and its professional advisers to ensure compliance with the Companies Act and the UKLA Listing Rules and DTRs. Corporate Governance and Shareholder Relations: Details of the Company s compliance with Corporate Governance best practice, including information on relations with shareholders, are set out in the Corporate Governance report on pages 27 to 31. Operational: Disruption to, or failure of, the Manager s accounting, dealing or payments systems or the custodian s records could prevent accurate reporting and monitoring of the Company s financial position. Details of how the Board monitors the services provided by the Manager and its associates and the key elements designed to provide effective internal control are included within the Risk Management and Internal Control section of the Corporate Governance report on pages 30 and 31. Financial: The financial risks faced by the Company include market price risk, interest rate risk and credit risk. Further details are disclosed in note 22 on pages 57 to 63. Board Diversity When recruiting a new Director, the Board s policy is to appoint individuals on merit. Diversity is important in bringing an appropriate range of skills and experience to the Board. At 30th June 2014, there were five male Directors and one female Director on the Board. Employees, Social, Community and Human Rights Issues The Company has a management contract with JPMF. It has no employees and all of its Directors are non-executive. The day to day activities are carried out by third parties. There are therefore no disclosures to be made in respect of employees. The Board notes the JPMorgan Asset Management ( JPMAM ) policy statements in respect of Social, Community and Environmental and Human Rights issues, as highlighted in italics: Social, Environmental and Human Rights JPMAM believes that companies should act in a socially responsible manner. Although our priority at all times is the best economic interests of our clients, we recognise that, increasingly, non-financial issues such 20 JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

23 as social and environmental factors have the potential to impact the share price, as well as the reputation of companies. Specialists within JPMAM s environmental, social and governance ( ESG ) team are tasked with assessing how companies deal with and report on social and environmental risks and issues specific to their industry. JPMAM is also a signatory to the United Nations Principles of Responsible Investment, which commits participants to six principles, with the aim of incorporating ESG criteria into their processes when making stock selection decisions and promoting ESG disclosure. Our detailed approach to how we implement the principles is available on request. Greenhouse Gas Emissions The Company is managed by JPMF, has no employees and all of its Directors are non-executive, the day to day activities being carried out by third parties. There are therefore no disclosures to be made in respect of employees. The Company has no premises, consumes no electricity, gas or diesel fuel and consequently does not have a measurable carbon footprint. JPMAM is also a signatory to Carbon Disclosure Project. JPMorgan Chase is a signatory to the Equator Principles on managing social and environmental risk in project finance. Future Developments The future development of the Company is much dependent upon the success of the Company s investment strategy in the light of economic and equity market developments in the countries in which it invests. The Investment Manager discusses the outlook in his report on pages 7 and8. By order of the Board Jonathan Latter, for and on behalf of JPMorgan Funds Limited, Company Secretary 1st October 2014 JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts

24 Governance Board of Directors Alan Saunders (Chairman of the Board and of the Nomination Committee and Remuneration Committee) A Director since May Last reappointed to the Board: Remuneration: 35,000. An Independent Investment Consultant with Allenbridge Epic Investment Solutions Limited. Mr Saunders was formerly Chief Economist at Royal Dutch Shell and also held senior investment roles in both Lazards and the Private Banking Division of UBS A.G. He is currently independent investment adviser to Dorset County Council Pension Scheme, an independent trustee of two private sector pension schemes, a Non-Executive Director of CBRE Global Investors and a member of the with-profits committee and investment strategy committee of Lloyds Bank Insurance. He also sits on with-profits committees at Clerical Medical Insurance Company and Scottish Widows. Connections with Manager: None. Shared directorships with other Directors: None. Shareholding in Company: 6,000 Ordinary shares. David Gamble * (Senior Independent Director) A Director since April Last reappointed to the Board: Remuneration: 26,500. Formerly Chief Executive of British Airways Pension Investment Management, a Director of F&C Emerging Markets Investment Trust plc and New Star Asset Management Group plc. Mr Gamble is currently a Director of Montanaro Asset Management Limited, a member of the investment committee of the BBC Pension Trust Limited and a Director of two other investment trusts and a number of other companies. Connections with Manager: None. Shared directorships with other Directors: None. Shareholding in Company: 3,781 Ordinary shares. Anatole Kaletsky * A Director since September Last reappointed to the Board: Remuneration: 24,000. Chief Economist of Gavekal Dragonomics, a Hong Kong based company which provides economic analysis and asset management services to financial institutions around the world. Formerly Editor at Large at The Times of London. Economic commentator for Reuters and the New York Times. Connections with Manager: Mr. Kaletsky is a founding partner and Chief Economist of Gavekal Dragonomics, whose clients include JPMorgan. Shared directorships with other Directors: None. Shareholding in Company: 5,043 Ordinary shares. 22 JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts 2014

25 Percy Mistry * A Director since January Last reappointed to the Board: Remuneration: 24,000. Chairman of The Oxford International Group which comprises companies engaged in investment banking, asset management, private equity investment and strategic financial and economic services to governments and multinational companies in emerging market countries. He was previously CEO of Synergy Power Corporation, a director of ICICI and non-executive chairman of D.C. Gardner. He was also an advisory member of the Forum on Debt and Development and has held several senior positions with the World Bank. Connections with Manager: None. Shared directorships with other Directors: None. Shareholding in Company: 10,000 Ordinary shares. Nigel Kenny * (Chairman of the Audit Committee) A Director since September Last reappointed to the Board: Remuneration: 29,000. A founding partner of emerging markets private equity company Sabre Capital. He is currently an independent non-executive director of UC Rusal Ltd, the world s largest producer of aluminium and alumina products, and a non-executive director of First City Monument Bank Plc, a bank listed on the Nigerian stock exchange. He was previously an independent non-executive director of PartyGaming Plc. Between 1992 and 2002 Mr Kenny held a number of senior positions at Standard Chartered Bank, including Group Head of Operations, Corporate and Institutional Banking and Finance Director. Prior to that he spent 14 years with Chase Manhattan Bank. He is a chartered accountant. Connections with Manager: None. Shared directorships with other Directors: None. Shareholding in Company: 3,500 Ordinary shares. Sarah Arkle * A Director since September Last reappointed to the Board: Remuneration: 24,000. Non-executive director of Foreign & Colonial Investment Trust plc, Henderson Group plc and a member of the Newnham College Cambridge Investment Committee. She was previously an advisor to the South Yorkshire Pension Fund and was Chief Investment Officer of Threadneedle Asset Management where she held a number of other senior positions. Connections with Manager: None. Shared directorships with other Directors: None. Shareholding in Company: 6,000 Ordinary shares. * Member of the Audit Committee Member of the Nomination Committee Member of the Remuneration Committee Considered by the Board to be independent JPMorgan Emerging Markets Investment Trust plc. Annual Report & Accounts